More Private Lending By Banks

Press, Volume CX, Issue 32381, 21 August 1970, Page 20

More Private Lending By Banks

(New Zealand Press Association) WELLINGTON, August 19. New Zealand trading banks will increase their lending to the private sector more rapidly than in the past to finance economic development, the chief inspector of the Bank of New Zealand (Mr V. L. Ansell) said at a conference on banking.

“There is a growing awareness that banks cannot fulfil their proper role in financing the development of the New Zealand) economy, nor can they compete effectively for deposits if a steadily increasing proportion of their assets has to be invested in relatively low-yielding Govern-, ment securities,” Mr Ansell said. “I believe that as a consequence of a changed approach to monetary policy, the banks will pay a greater role in financing economic development, and this means that their lending to the private sector will increase more rapidly than in the past” Mr Ansell was the first speaker at the conference, jointly organised by the New Zealand Bankers’ Association and the New Zealand Institute tial demand for this type of lending, he said. “Term loans are admirably suited to the purchase of plant and machinery and, as such, can play a major part together with expanded over-

drafts, in financing the expansion of New Zealand industry.” The demand for term loans was likely to intensify because of Management, Wellington division. Mr Ansell said he believed there would be a particularly significant increase in med-ium-term loans to manufacturing industries. Although the current authorised volume of term lending by trading banks is currently at the low level of about $24 million, there was a substan-

of the rapid pace of technological change, and the associated demand for new industrial plant.

Mr Ansell said long-term mortgage finance to the private sector was also likely to expand.